Objectives: Cilostazol improves walking in patients with peripheral arterial disease (PAD). We hypothesized that cilostazol reduces diabetic complications in PAD patients. Methods: Diabetic PAD patients were prospectively recruited to a randomized double-blinded, placebo-controlled trial, using cilostazol 100mg twice a day. Clinical assessment included ankle-brachial index, arterial compliance, peripheral transcutaneous oxygenation, treadmill walking distance and validated quality of life (QoL) questionnaires. Biochemical analyses included glucose and lipid profiles. All tests were at baseline, 6, and 24 weeks. Results: 26 diabetic PAD patients (20 men) were recruited. Cilostazol improved absolute walking distance at 6 and 24 weeks (86.4% vs. 14.1%, P = .049; 143% vs. 23.2%, P = .086). Arterial compliance and lipid profiles improved as did some QoL indices for cilostazol at 6 and 24 weeks. Blood indices were similar at baseline and at follow-up points for both treatment groups. Conclusions: Cilostazol is a well-tolerated and efficacious treatment, which improves claudication distances in diabetic PAD patients with further benefits in arterial compliance, lipid profiles, and QoL.